Audit Findings under sec 65(6) informed after 30 days

[SHARAD ANADA]

As per Sec.65(6) on conclusion of Audit, the proper officer shall, within 30 days, inform the Registered person, whose records are audited, about the findings,his rights and obligations and the reasons of such findings.

As required under sec. 65(6) the proper officer has not informed the RTP about findings ,his rights and obligations and reasons for such findings even after 30 days. Can the Registered person change the findings and demand raised in the audit report? Is there any High Court judgement in this regargs in which High Court grants relief to the Registered person? Request to share Judgement.

[SOWMYA CA]

The findings of the audit by the tax department as provided u/s. 65(6) is the Audit Report. If Audit Report is issued. If there are pending liabilities, intimation of tax liability U/s. 74(5) vide DRC-01A is done. On receipt of DRC-01A, you may accept or reject the demand n part B or challenge the demand before the proper officer. Once Audit report is generated and SCN is raised, the work of the audit team is over, Any further proceedings is before the Proper Officer

[Shilpi Jain]

There is no consequence mentioned for not complying with 30 days time limit. So this can be considered to be a recommendatory kind of provision rather than a mandatory one.

Any other expert can also throw.light on this aspect

[SHARAD ANADA]

Madam,

Wordings of sub section suggest proper officer "SHALL" , so in my veiw it is mandatory. Again it takls about speaking audit report.

[SOWMYA CA]

The format of the Audit report u/s. 65(6) is already prescribed. It will be in Form ADT-02

[Shilpi Jain]

The provision may use SHALL. But I do not see any consequences on not complying because it does not matter if the time limit to issue scn still exists.

[KASTURI SETHI]

Dear Sir,

Literally and legally you are absolutely right. Time limit is meant for both Govt. and RTP. We should not always follow beaten track.

Regarding the case law, you will have to work hard yourself. You cannot get cooked up material here. If you are firm determined to fight on the word,'SHALL', you should peruse all those case laws wherein famous law firm, namely, Lakshmikumaran & Sridharan has represented.

This law firm always fights on of the meanings of the letters, words, phrases and sentences in isolation. How these are used and how these should have been used ? The letters, words, phrases, sentences, conjunctions etc. change the entire meaning and message.

In my view, you must go ahead. Nobody is above law whether law enforcers or assessees.

[KASTURI SETHI]

To talk of the word, 'SHALL' is not annexed with any consequence(s), is the jurisdiction of of a court.

[Amit Agrawal]

Just some food for thought/s:

A. Timeline of 30 days prescribed under section 65 (6) starts from 'conclusion of audit'.

B. How one intent to prove that date when audit was 'concluded'.

B1. Just because assessee submitted all of asked information, documents, explanation etc. or just because officers visited premises for purpose of audit ...... just not necessarily mean that audit was 'concluded'.

C. Lastly, what assesses intends to challenge by using this time-limit and what it intends to achieve? This will be on minds of court while interpreting the word 'Shall' in Section 65 (6) as 'Either May or Shall'.

[Amit Agrawal]

Just to add to my last post:

Sub-rule (4) & (5) of Rule 101 are worth noting, in the context of this discussion:

4) The proper officer may inform the registered person of the discrepancies noticed, if any, as observed in the audit and the said person may file his reply and the proper officer shall finalise the findings of the audit after due consideration of the reply furnished.

(5) On conclusion of the audit, the proper officer shall inform the findings of audit to the registered person in accordance with the provisions of sub-section (6) of section 65 in FORM GST ADT-02.

I do not think that this rule gives any timeline for proper officers for first, to inform the discrepancies noticed to the assessee and then, to finalize findings of audit.

[Amit Agrawal]

However, Section 65 (4) indeed have timeline to complete audit, but, this timeline starts only after 'commencement of audit' as explained therein under.

But, this can be another area of dispute on 'facts' between audit-officer and assessee, specially when assesses is claiming some relief by trying to prove delay in sharing audit-findings (i.e. beyond 30 days timeline prescribed in Section 65 (6)).

So, and as said my first post in this discussion, one needs to see what assesses intends to challenge by using this time-limit and what it intends to achieve?

And then, one needs to analyse if there is any real possibility of such achievements under law (as intended by assessee) specially when issue can be easily disputed on 'facts' (i.e. date of conclusion of audit).

[Anwar Uddin]

Sir

Maximum time limit to complete GST audit under section 65(6), ? 3 months or 6 months or more?

AI Summary

Audit Notice Requirement: failure to inform registered person within statutory period may enable procedural challenge to subsequent demands.
The proper officer must inform the registered person of audit findings, rights, obligations and reasons within the statutory 30 day period after audit conclusion, using the prescribed audit report (Form ADT 02). Although the provision uses "shall," neither the statute nor the rules specify a consequence for missing the timeline; once an audit report triggers a demand intimation or show cause notice, subsequent proceedings lie with the proper officer. Disputes commonly turn on proving the audit's date of conclusion and whether any delay affords a viable challenge to ensuing demands.